Essay on Financial Statement Analysis: Krispy Kreme

1328 WordsJan 18th, 20126 Pages

Financial Statement Analysis

Case Analysis: Krispy Kreme Doughnuts

1. Analysts are predicting that Krispy Kreme will be able to perform highly effectively and continue to grow rapidly in the coming two years. What are the key factors underlying the growth (at least 2)? Do you agree with their analysis? What are some potential concerns (at least 2)?

Analysts are predicting that Krispy Kreme will be able to perform highly effectively and continue to grow rapidly in the upcoming two years. Several factors can be the result of this rapid growth. Krispy Kreme’s brand is based on high quality products. They continue to excel in their field of providing top quality doughnuts to satisfy the needs of the consumer. Furthermore the…show more content…

In the case of Krispy Kreme particularly, one should acknowledge the fact that consumers may get bored of donuts and stop buying them. Donuts have been around for centuries and have been popular for many years amongst consumers. However, no one really knows if consumers will continue to purchase donuts in the upcoming years or not. In order to avoid this from happening, Krispy Kreme needs to start and diversify their products and provide consumers with products other than donuts, such as sandwiches, cocktails and such. Competition is another factor that has to be taken into consideration. No one really knows if another company opens up that would also sell donuts and may take over the market share that Krispy Kreme currently maintains. This is likely to be a long-term risk that has to be taken into account; and in order to fight it Krispy Kreme needs to distinguish itself amongst other competitors by holding a competitive advantage over them in order to keep getting consumers to come back.

2. What factors did the CIBC analysts examine to forecast sales growth for KKD in the years ended January 2003 and 2004?

a. What assumptions did they implicitly make about the number of new stores and weekly sales per store (for both company and franchise stores)?

b. What are their implicit assumptions about revenue growth from franchise operations and KKM&D?

from a New Orleans French chef and began selling Krispy Kreme doughnuts to local grocery stores in Winston Salem, N.C. People would pass by these stores smelling the delicious scent of Rudolph’s doughnuts and ask to buy hot doughnuts, so Rudolph cut a hole into the wall of his rented building and began selling the Original Krispy Kreme doughnuts to customers who walked by on the sidewalk (History, 2012).
By the 1950s Rudolph and Krispy Kreme were doing well with a few family owned chain stores…

report by touching on the history of Krispy Kreme. Vernon Rudolph started Krispy Kreme in 1933 when he bought a doughnut shop from Joe LeBeau. He later established the first Krispy Kreme in Salem, North Carolina. After Scott Livengood became CEO, the company repositioned itself and focused on being a specialty retailer, rather than a wholesale bakery. They soon began expanding rapidly throughout the United States. This particular case took place in 2004 Krispy Kreme was beginning to run into some serious…

Financial Analysis:
Krispy Kreme Doughnuts, Inc. operates as a branded retailer and wholesaler of doughnuts and coffee. It engages in the ownership and franchising of Krispy Kreme doughnut stores, which make and sell approximately 20 varieties of doughnuts. These stores also offer a wide variety of coffees and other beverages. As of January 31, 2010, there were 224 Krispy Kreme stores operated domestically in 37 U.S. states and in the District of Columbia and 358 shops in other countries internationally…

Analysis and Recommendations: Krispy Kreme Doughnuts, Inc.
Krispy Kreme Doughnuts, Inc.
370 Knollwood Street
Suite 500
Winston-Salem, North Carolina 27103
PURPOSE: The purpose of this study is to issue my recommendations to the CEO and Board of directions of Krispy Kreme. This corporation is on a downward spiral and changes must be made at a rapid pace in order for any hopes of survival. It is struggling financially and struggling to remain a valued member of the New York Stock Exchange…

Krispy Kreme
Financial Health Analysis
ACC 226
Depreciation Analysis:
Depreciation is the term used for the decline of an object value over time. Krispy Kreme’s depreciation is calculated using the straight line method. Benefits from asset are more likely to be constant over its live, thus making straight line method of depreciation more appropriate as it results in a constant annual depreciation change.
Krispy Kreme uses SFAS-142 for accounting of intangible assets. Per this method…

Krispy Kreme Doughnuts Incorporates principal activity is to produce and market doughnuts and related items. The operations are carried out through three segments, company stores operations, franchise operations and Krispy Kreme Manufacturing and Distribution. The stores are both retail outlets and highly automated producers of over twenty varieties of doughnuts. The company is a branded specialty retailer, and produces more than three million doughnuts a day. In addition to its Krispy Kreme stores…

I. INTRODUCTION
Krispy Kreme Doughnuts, Inc. (KKD) is an international retailer of high-quality sweet treats, including its signature hot Original Glazed® doughnut. It began as a small bakery in Winston Salem, NC on July 13, 1937. Since then, the company has built a global reputation for serving the highest-quality doughnuts and great tasting coffee.
Krispy Kreme Doughnuts is part of the Quick Service Restaurant (QSR) Industry, which includes almost all companies in the “fast food” industry…